Equities and government stocks move in opposite directions
The MSE Equity Total Return Index fully erased two months' worth of gains, as it kicked off 2019 with a 1.802% decline to close at 8,836.856 points. Activity was slightly lower than December, as a turnover of €7.4 million was generated over 821 deals, compared to the previous month's figure of €8.2 million.
This activity was spread across 23 equities, of which 15 traded lower, while only six gained ground. Some of the main contributors for the negative performance were MaltaPost plc, the banking equities, as well as various others carrying smaller market capitalisation which also posted substantial losses.
MaltaPost plc led the list of fallers, as it plunged to a 4-year low of €1.20 at one point, before bouncing slightly back, to settle at €1.27. This translates to an overall loss in value for the month of 19.62%. Investor participation in the equity was unimpressive, as the large movement in price was the result of just seven trades of 7,475 shares.
The banking industry, which carries a large market weight, showed weakness during this first month of the year, as all three active equities posted significant losses. Bank of Valletta plc started the new year in line with the negative trend which was set throughout 2018, as it lost a further 4.51% in value to close at a multi-year low of €1.27. The equity was the most liquid, as it was responsible for over 22% of the total turnover in the equity market, with 236 transactions of almost 1.3 million shares.
Its peer, HSBC Bank Malta plc surrendered the previous month's gain as it registered an even larger decline of 5.46%, to close at a price of €1.73. Traded volume amounted to 204,646 shares across 37 transactions. The company's board of directors is scheduled to meet on February 19, 2019, in order to approve the financial statements for 2018. The directors will also consider the recommendation of a final dividend to the Annual General Meeting which shall be held on April, 17.
The worst performer in the industry however was FIMBank plc, as it extended the previous month's significant loss of 5.06%, with another decline of 6.67%. The equity closed the month at $0.70, as a result of 17 transactions of a combined 303,604 shares.
In the food and beverage sector, the gains registered by Simonds Farsons Cisk plc during the past two months proved unsustainable, as the equity drifted 8.57% in January, to return to a price of €8.00. A sizeable turnover of €520,626 was generated across 25 trades.
Telecommunications company, GO plc was one of the few exceptions, as it continued to build on its positive note, with a 7.07% appreciation for the opening month of 2019. The equity traded heavily as €805,719 worth of shares traded over 84 deals, resulting in the equity closing at €4.24.
Throughout the month, the Initial Public Offering by which GO shall be disposing of up to 49% of its shareholding in BMIT Technologies plc took place. The prospectus was issued and made available to the public. The offer period during which the company's shareholders and general public could apply for shares in BMIT is now closed, as applications were being accepted between January 17 and January 31.
The company also announced that its board is scheduled to meet on March 8, 2019 to consider and approve the company's audited financial statements for 2018, and also to consider the declaration of a final dividend to be recommended to the Annual General Meeting.
In spite of a significant traded volume of 340,507 shares over 33 transactions, PG plc closed the month at an unchanged price of €1.33.
Malta International Airport plc also traded heavily, as a turnover of €1.3 million was generated over 95 transactions, to close the month at €6.30. The equity fully recovered the previous month's loss, as it soared 8.62% to return to its overall positive path set out throughout 2018.
The positive performance was partly the result of an update which the company provided to the market regarding the final traffic results for 2018, and its forecasts for the new year. Over the past three years, the airport has recorded an increase in traffic of 47%, reaching a record-breaking €6.8 million in 2018.
In 2019, the company is forecasting a further increase of 5.8% in passenger movements to 7.2 million. Total revenue is expected to reach €96 million during 2019, translating to a projected net profit reaching €31 million. As indicated in the company's monthly updates, the most popular markets for 2018 were the UK, Italy, Germany, France and Spain, all of which registered growth following the introduction of better connections.
The company has earmarked over €20 million to continue its projects during 2019, including the airport campus project and the development of the aircraft parking area, Apron 10. The company is also currently working on its parking village project, while it has also recently issued a call for submission of design concepts for the €40 million SkyParks 2 development.
The board of directors shall be meeting on February 20, 2019, to consider and approve the financial statements for 2018, and also to consider recommending a dividend payment to the Annual General Meeting.
Grand Harbour Marina plc extended its negative run to three consecutive months, as it shed another 12.86% off its share price, to close at €0.61. Traded volume amounted to 54,326 shares across eight transactions.
In the insurance industry, Mapfre Middlesea plc announced that its board of directors is scheduled to meet on March 13, 2019 to consider and approve the company's audited financial statements for the financial year ended December 31, 2018. The board shall also consider the declaration of a dividend, if any, to be recommended to the Annual General Meeting. In terms of trading, the equity fully erased two months' worth of gains, to return to October's closing price of €1.92. The 3.52% decline in price was the outcome of 11 trades of 17,507 shares.
Its peer, GlobalCapital plc erased a major portion of the large gain recorded in December, as a couple of deals of just 5,380 shares dragged the price downwards by 16.87% to €0.276.
Santumas Shareholdings plc also traded on characteristically slim volume, as three trades of just 236 shares were all executed at an unchanged price of €1.42.
In the energy sector, Medserv plc announced that it has been awarded a two-year contract extension by Eni North Africa to continue providing logistic marine base services in Malta. These services are to be carried out at the company's base at the Malta Freeport. Despite this positive announcement, the share price continued on a negative path, drifting a further 2.61% to close at €1.12. A total of 120,611 shares changed hands over 20 transactions.
International Hotel Investments plc traded 48 times over the course of the month, as 282,834 shares were exchanged. As a result, the share price fell 3.23% to close at €0.60.
The best performer for January was Loqus Holdings plc, as it hiked another 26.67% to reach the highest price since June 2018, that of €0.095. In total, 41,173 shares traded over seven deals. Towards the end of the month, the company held its Annual General Meeting, during which the audited Financial Statements for the year ended June 30, 2018 were approved. The auditors and directors were also appointed.
RS2 Software plc continued on its strong end to 2018, extending its winning streak to three straight months. The equity climbed another 5% to a price of €1.47, on a substantial volume of 469,521 shares over 64 deals.
The property market was dominated by selling pressure as from the seven active equities, five posted falls, led by Malta Properties Company plc. The equity sank 7.89% to a price €0.525, as 433,442 shares changed ownership over 27 transactions.
On the other hand, Malita Investments plc continued on December's recovery, as it advanced 4.55% to reach €0.92. Trading volume totalled 376,991 shares over 33 deals.
The other exception to the industry's negative performance was Plaza Centres plc as it posted a gain of 0.98% to reach €1.03. A total of 26,850 shares were exchanged across seven transactions.
During the month, Main Street Complex plc published a performance update for 2018. During the last five months of the year, the Paola shopping complex saw consistent increases in the footfall monthly figure, ultimately totalling an annual figure of more than 840,000 visitors, which is the highest ever recorded by the mall. The company's target is to secure full occupancy of the complex during 2019, as the occupancy level at the end of 2018 stood at 96%. Company earnings for the year are expected to be in line with the budget.
In spite of this announcement, the equity lost 3.08% in value, as it closed at €0.63, the lowest price since being listed for trading. Trading activity was quite limited as 45,200 shares were exchanged over eight deals.
Tigne Mall plc recorded just one deal of 1,020 shares, which shaved 0.52% of the share price, to €0.96.
MIDI plc shares oscillated between €0.60 and €0.67, ultimately closing 1.49% lower at €0.66. The property equity was active on 29 transactions of 607,893 shares.
Trident Estates plc followed suit with a similar loss in value of 1.52%, closing at €1.30. Turnover however was significantly lower than its peer's as 60,902 shares traded over 19 trades.
In the corporate bond market, turnover amounted to €11.2 million, spread across 56 issues, of which 24 declined and 20 appreciated. The 4% International Hotel Investments plc Secured € 2026 recovered previous losses as it advanced by 1.94%, to close at €105. On the other hand, the 6% Mediterranean Investments Holding plc Euro 2021 was the worst performer, as it completely wiped out the previous month's gain with a 4.49% loss in value, to a price of €101.
Yields in the sovereign debt market were lower, as from the 26 issues that were active, 19 rose and 7 fell, amounting to a turnover of €22.4 million. The bulk of the gains was recorded by the issues with longer terms to maturity, while the seven shortest-dated active issues all posted losses.
The 2.1% MGS 2039 (I) was the most liquid, having witnessed a turnover of €5.2 million. The issue was also the best performer as it added 2.55% in value, to close at a price of €104.50. At the other end of the spectrum, the 3.2% MGS 2019 (V) lost 0.86% to a price of €101.79.
This article, which was compiled by Jesmond Mizzi, Managing Director of Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information, contact Jesmond Mizzi Financial Advisors at 67 Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]